Investment Rating - The investment rating for the automotive industry is "Positive" (maintained) [1] Core Insights - The automotive industry faces significant challenges regarding vehicle emissions, with motor vehicle exhaust being a major contributor to air pollution. Currently, motor vehicle NOx emissions account for over 34% of the national total, with heavy-duty trucks contributing 80% of this figure. In major cities like Beijing, Shenzhen, and Chengdu, vehicle emissions contribute over 40% to PM2.5 pollution [4][8] - The transition to the National VII emission standards is expected to create a market space exceeding 200 billion yuan from 2027 to 2030, driven by the need for new components and system upgrades to meet stricter emission requirements [4][3] Summary by Sections 1. Mobile Source Air Pollution - Motor vehicle exhaust is a leading source of air pollution, with heavy-duty trucks being the primary contributors to NOx emissions [4][8] - In 2023, the total emissions from mobile sources reached 1,924.6 million tons, with motor vehicles accounting for over 70% of this total [12][19] 2. Historical Standards Review and Outlook - The National VI emission standards are significantly stricter than previous standards, reflecting a trend towards tighter regulations and alignment with international standards [47][48] - The National VII standards are being developed with a focus on reducing emissions and improving vehicle durability, with a phased implementation strategy [48][51] 3. National VII Gradual Implementation - The National VII standards are expected to introduce new components focused on cold start emissions reduction, NOx reduction, and monitoring system upgrades, creating substantial market opportunities [4][3] - The projected incremental market space for automotive after-treatment systems from 2027 to 2030 is estimated at 2,442.2 million yuan, 4,813.0 million yuan, 6,357.0 million yuan, and 7,331.0 million yuan respectively [4][3] 4. Related Companies - Companies with strong technical capabilities and broad product layouts in the after-treatment sector are recommended for investment, including Yunyi Electric, Aikelan, Zhongzi Technology, and Weifu High-Tech [4][3]

Investment Rating - The report assigns a "Buy" rating for the company, marking the first coverage of the stock [16]. Core Views - The company is positioned as a leading player in the automotive electronics sector, with a focus on intelligent core electronic products and vertical integration of the supply chain, which enhances its competitive edge [6][7]. - The establishment of a joint venture with Chanjin Group is expected to significantly boost the company's business volume, particularly in areas such as intelligent driving domain controllers and power domain controllers [15]. - The company's revenue and profit are projected to maintain robust growth, driven by the expansion of its sensor, intelligent wiper system, semiconductor, and new energy connector products [16]. Summary by Sections Company Overview - Yunyi Electric focuses on automotive intelligent core electronic products and has established a comprehensive industrial layout over the past two decades, including various subsidiaries specializing in different automotive electronic components [6][8]. Business Segments - The company has stable revenue from its smart power controllers, which generated 1.42 billion yuan in revenue, accounting for 66.4% of total revenue, with a gross margin of 33.6% [6]. - Growth segments include intelligent wiper systems, semiconductor power devices, and sensor products, which are expected to expand rapidly [7][8]. Financial Performance - The company has shown strong revenue growth from 2020 to 2024, with revenues increasing from 840 million yuan in 2020 to 2.15 billion yuan in 2024, representing a CAGR of 26.5% [8]. - The gross margin has remained stable, with a slight increase projected from 31.7% in 2024 to 30.5% in 2025 [8][16]. Market Position - The company is a leader in the smart power controller market, with a projected market share of 27.4% in 2024, benefiting from established relationships with major automotive manufacturers [10][15]. - The nitrogen oxide sensor market is expected to grow significantly due to stricter emission standards, with the company positioned to capture a share of this market through its proprietary technology [11][12]. Future Outlook - Revenue forecasts for 2025 to 2027 are 2.6 billion yuan, 3.08 billion yuan, and 3.62 billion yuan, respectively, with net profits expected to reach 480 million yuan, 575 million yuan, and 682 million yuan [16][18].

Core Viewpoint - Yunyi Electric plans to establish a joint venture with Chanzhi Group, focusing on various automotive electronic control systems, which is expected to enhance its market position and drive growth in its business segments [1][14]. Company Overview - Yunyi Electric specializes in automotive intelligent core electronic products, with a vertically integrated supply chain that enhances its competitive edge [2]. - The company has established multiple subsidiaries over the years, expanding its product offerings in automotive electronics, including power controllers, sensors, and other components [2][3]. Business Segments - The company categorizes its business into stable growth and growth segments, with stable revenue from smart power controllers and emerging revenue from smart wiper systems, semiconductor power devices, and sensor products [2][4]. - In 2024, the revenue breakdown shows smart power controllers contributing 14.2 billion yuan (66.4% of total revenue) and emerging segments like smart wipers and sensors contributing smaller but significant portions [2]. Financial Performance - Yunyi Electric has maintained robust revenue growth from 2020 to 2024, with projected revenues increasing from 8.4 billion yuan in 2020 to 21.5 billion yuan in 2024, reflecting a compound annual growth rate (CAGR) of 26.5% [4]. - The company's gross margin has remained stable, with a slight increase projected from 29.7% in 2022 to 31.7% in 2024, indicating effective cost control and operational efficiency [4]. Market Position - The company is positioned as a leader in the smart power controller market, with a projected market share of 27.4% in 2024, benefiting from long-term relationships with major automotive manufacturers [6][14]. - The market for nitrogen oxide sensors is expected to grow significantly due to stricter emission standards, with a projected demand of 18 million units annually, translating to a market size of 14 billion yuan [7]. Strategic Partnerships - The joint venture with Chanzhi Group, which holds a significant stake in Changan Automobile, is expected to facilitate rapid entry into Changan's supply chain, enhancing the sales of various products including smart power controllers and sensors [14]. - The collaboration aligns with Changan's ambitious production goals, including a target of 5 million vehicles by 2030, which will likely drive demand for Yunyi Electric's products [14]. Future Outlook - Revenue forecasts for 2025 to 2027 predict continued growth, with expected revenues of 26.0 billion yuan in 2025 and 36.2 billion yuan in 2027, supported by the expansion of sensor and smart wiper system sales [15].

Summary of Ampelon Conference Call Company Overview - Ampelon reported a revenue of 746 million yuan in 2024, a year-on-year increase of 2% [2][4] - The company achieved an operating cash flow of 90.23 million yuan, up 5.7% year-on-year [2] - Gross margin improved to 32.24%, an increase of 0.41 percentage points year-on-year [2] Financial Performance - In Q1 2025, revenue reached 261 million yuan, a 42.15% increase year-on-year [2][6] - Net profit for Q1 2025 was 20.37 million yuan, up 59.49% year-on-year [2][6] - Pressure sensors accounted for nearly 50% of 2024 revenue, growing 32.17% year-on-year [2][4] - Automotive sector revenue exceeded 55%, with a year-on-year growth of 32.84% [2][4] Growth Projections - Ampelon expects revenue growth of no less than 20% in 2025 [2][8] - R&D investment will continue to increase, particularly in IC design, MEMS, autonomous driving, and force sensing [2][7] - The company anticipates a decrease in expense ratio, positively impacting net profit [2][7] Product Development - Ampelon is the first domestic company to achieve domestic substitution of oxygen sensors in automotive applications, with two car brands currently using their products [2][11] - The nitrogen-oxygen sensor, an upgraded version of the oxygen sensor, is expected to become a mandatory option under the Euro 7 standard starting January 2027 [2][12] - The company has developed a complete force sensor product system, including unidirectional force, 3D force, and six-dimensional force sensors [2][14] Market Dynamics - North American T customers contributed significantly, with their temperature and pressure integrated management system accounting for nearly 30% of global supply [5] - The company is addressing price pressure through automation, supply chain cost reduction, and technological cost reduction, aiming to restore gross margin above 30% [5][19] - The overseas customer base is expected to grow, as overseas customers generally have better gross margins [18] Key Customer Insights - Major clients include Magna, North American T customers, and others in the automotive sector [16] - Selenex is expected to achieve revenue comparable to BYD, estimated at over 200 million yuan [17] - The company has established a strong presence in the automotive sector, with significant contributions from various clients [16][30] Future Outlook - Ampelon plans to expand its product offerings, including MEMS pressure sensors and ceramic capacitors, targeting international clients like Mercedes, BMW, Honda, and Toyota [39][41] - The company is also focusing on the development of six-dimensional force sensors and expects to launch products in the second half of 2025 [10][37] - Overall, Ampelon aims for stable growth of 20%-30% annually, supported by a diverse product portfolio [40]